Guide to 10-Year Builder Warranties

What is a Home Warranty?

When making a large purchase, such as a car, house or even an expensive piece of technology, it’s likely that you’re going to be offered the chance to get the item covered by a warranty. It’s important to understand what a warranty is, what it covers, and what that means for you.

When it comes to homes, warranties typically cover appliances and systems: major appliances, electrical, plumbing, HVAC, etc. Luckily, most builders will offer you a warranty to cover your newly constructed home or provide the option to sign up for one offered by a third-party company that can assume coverage of specific claims. To better understand what your warranty will cover, you’ll want to be sure you pick the right builder for you. Our article on tips for selecting a builder will help you make an informed decision so you can make sure you have all the information you need.

A “builder” warranty differs from a home warranty in that it is provided by the builder rather than purchased directly by the homeowner, and typically only applies to newly constructed homes. Home warranties offered by builders will usually cover all major appliances and systems for a set period, while warranties offered by independent companies are more specialized in their coverage. They tend to differ from builder to builder, but most will cover the major appliances, systems and workmanship of a newly constructed home for the agreed upon period.

What is a 10-Year Builder Warranty?

Like most other warranties, builder home warranties are offered in specific segments of time: typically, up to 1, 2 or even 10 years. There is a difference in what they cover; the 1-year warranty will usually cover the workmanship and materials used to construct the home, while the 2-year warranty will cover appliances and systems such as HVAC, electrical, plumbing, heating, ventilation and windows. The 10-year warranty covers structural issues and defects that occur to the house’s frame within the period of coverage. To learn about them in more detail, check out our article on builder warranties here.

The term “10-year warranty” is somewhat misleading. Sometimes the phrase is used to indicate that you can get a warranty for your home anywhere from 2-10 years, rather than always referring to the maximum of 10 years. In those cases, you may get the benefits of a 2-year warranty that covers the home’s major systems and appliances, and a 10-year warranty responsible for covering the house’s structural integrity. This will vary from builder to builder and state to state, but all builders are required by law to maintain the home’s structure within the stipulated period.

What does a 10-Year Builder Warranty cover?

An important question to ask is, what qualifies an issue or defect with a house’s structure? 10-year builder warranties are designed to protect the most essential parts of a home’s structural integrity, such as load-bearing walls, roofing and its framing, supporting beams and columns, flooring and foundation systems, and other major supporting structures within the frame. To be a qualifying issue, the defect has to meet certain criteria: there must be tangible evidence of damage to a load-bearing element, the failure of that element must be the cause of the damage, and it must cause the house to be unfit for habitation.

While it’s required by law that builders are legally responsible for upholding the terms of a 10-year home warranty, the somewhat ambiguous nature of the damage to the home can sometimes make it difficult to make a claim. For example, a 10-year warranty typically won’t cover damage that is caused by something outside of the builder’s control, such as normal exposure to the elements or small cracks in brick, cement or tile or household appliances. It’s worth noting that if your warranty isn’t expired, your builder may still be able to help with those issues, so consider reaching out if you run into these problems. Our guide to home insurance for new homeowners can help with understanding how you can cover the costs of issues that fall outside of the purview of your builder warranty.

What is the Cost of a Structural Claim?

A structural claim can potentially have varying costs. They generally cost between 0.25 and 0.50 percent of the total price of the home, including the land it’s built on if you’re looking for the full 10-year coverage. The total cost of the claim will depend on the extent of the damage, as well as the terms of the warranty itself.

Additionally, you may have a cap on your claim, meaning that your builder may cover up to a certain amount for some claims. For example, if a claim costs $5000, and your warranty caps at $2500, then you will have to cover the remaining $2500 cost out of pocket.

That covers the essential information on 10-year builder warranties. To learn more about all things home related, visit NewHomeSource.com to view articles and listings.